Taipei: Taiwan`s President Ma Ying-jeou on Thursday defended a controversial trade pact with China following protests against the deal, saying it would benefit the island`s economy.

Ma`s government has come under criticism for signing the agreement with Beijing to further open up the service sector trade, and scores of protesters gathered outside a hotel in Taipei where he was attending a conference today.

"There are many misunderstandings about the impact (of the pact)... There will be many more opportunities for our service sector in China so it is essentially beneficial for Taiwan," Ma said at a separate meeting with a business organisation.

He said Taiwan would not open up to Chinese labourers or allow Chinese investor immigrants under the pact, which was expected to boost its service sector exports to China by 37 percent.

On Tuesday, dozens of pro-independence activists clashed with police during a protest near Parliament against the agreement as lawmakers debated the pact.

Some tried to climb a fence but were grabbed and pulled down by police. Two demonstrators including an elderly woman were injured, the activist groups said.

Under the agreement signed in June, China will open 80 of its service sectors to Taiwanese companies, while Taiwan will in turn allow Chinese investment in 64 sectors.

The pact is one of the follow-up agreements to the sweeping Economic Cooperation Framework Agreement signed in 2010 to reduce trade barriers between the two sides.

Critics fear the pact will damage Taiwan`s economy, hurt its smaller service companies and cost many Taiwanese their jobs.

China still considers Taiwan part of its territory even though the two sides split in 1949 at the end of a civil war.

Relations have warmed since Ma came to power in 2008 on a platform of promoting trade and tourism with China. He was re-elected in January 2012.